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Keeping A Tab On the Power Industry – Market Update

Bullish economic outlook to sustain growth of electricity demand, while increase in generation share of combined cycle units is expected to place downward pressure on pool prices.

Demand Outlook:

chart Electricity demand in December '09 continued to show a strong positive year-on-year growth following its upward trend since May '09. This trend is supported by the recovery of the global financial markets as well as the warmer weather which was recorded from May '09 to December '09. The electricity demand, which had now surpassed its pre-economic crisis levels, is expected to be able to sustain its continued growth on the basis of a reasonably bullish economic outlook. Based on these observations, PowerSeraya expects maximum system demand to cross the 5,800 MW mark in the near future.

Supply Outlook:

PowerSeraya's new 2x370MW co-gen is scheduled to come on stream by Q2CY2010. Correspondingly, the overall generation share of combined cycle units is expected to increase (by 12%) at the expense of generation from the steam oil units. The resulting increase in the residual supply of baseload generation is expected to moderate and maintain some downward pressure on pool prices despite higher system demand.

* The above market commentary have been provided for information purposes only and do not constitute an offer to buy or sell, nor a solicitation of any offer to buy or sell any security or financial instrument or to participate in any trading strategy. PowerSeraya and its subsidiaries have no obligation to inform you when such information changes or is outdated. No representation or warranty is made with respect to the accuracy, completeness or currentness of the material contained above.

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